Maryland offers diverse attractions that have created a thriving short-term rental market, from Baltimore's bustling streets to Ocean City's sandy beaches. The Old Line State's coastal charm, historic cities, and proximity to Washington D.C. have made it a popular destination for travelers seeking alternatives to traditional accommodations.
Navigating Maryland's regulatory landscape presents unique challenges due to its two-tiered approach to short-term rental oversight. Unlike many states that delegate authority to local governments, Maryland maintains a statewide licensing requirement while allowing cities and counties to implement their own regulations. This creates a complicated framework for operators.
This guide covers short-term rental laws in Maryland, from the state's licensing system to requirements in major cities and counties. For more information on local regulations and operating an STR business, connect with Checkmate Rentals.
Understanding Maryland’s Short-Term Rental Laws
Maryland regulates short-term rentals with a statewide licensing requirement administered by the Maryland Short-Term Rental Commission. It allows significant local control at the county and city level. This creates a two-tiered regulatory framework where operators must comply with both state and varying local regulations.
The variation between cities and counties isn't merely administrative; it can determine whether a property can legally operate as a short-term rental. Some Maryland communities welcome vacation rentals with minimal restrictions beyond state requirements, while others have extensive regulations addressing zoning, permitting, and operational standards.
This multi-layered regulatory approach reflects Maryland's blend of state oversight and local autonomy. The state licensing system creates a consistent baseline of requirements, while local regulations allow communities to tailor additional rules to their needs. This means property owners must navigate both state and varying local requirements. A rental property management strategy that works in one Maryland city might be prohibited in a neighboring community.
In recent years, the regulatory landscape has become dynamic. As short-term rentals grow in popularity, more Maryland communities are developing regulations to address potential impacts on housing availability, neighborhood character, and local services. Regulations in place when you purchased a property may change, affecting your operational model and return on investment.
For property owners and investors, this evolving landscape makes thorough research and ongoing monitoring of state and local regulations essential. Understanding the specific rules for your property's location is the basis of legal compliance and successful operation in Maryland's short-term rental market.
Definition of a Short-Term Rental
Maryland provides a clear, statewide definition of short-term rentals for consistent regulation. This helps determine which properties need state licensing, though local jurisdictions may adjust the definition for their own purposes.
Maryland defines a short-term rental as the rental of a residential property for 88 nights or less. This threshold distinguishes short-term or vacation rentals from longer-term residential leases, which fall under different regulatory frameworks.
Baltimore City defines a short-term rental as a rental of a primary residence for less than 90 nights. Other jurisdictions like Gaithersburg and Ocean City define it as accommodations for less than 30 consecutive days. These variations underscore the importance of checking local definitions alongside the state standard.
Properties permitted for short-term rentals include:
- Single-family homes
- Condos and apartments
- Individual rooms in a residence
- Duplexes and multi-family units
- Vacation properties and second homes
Traditional accommodations like hotels, motels, and bed and breakfasts fall under separate regulatory frameworks with specific licensing and operational requirements. The distinction between a bed and breakfast and a short-term rental can be unclear, but usually hinges on factors like food service, management presence, and the number of units.
Some Maryland municipalities may refine these definitions with additional criteria. For instance:
- Distinctions between owner-occupied (hosted) and non-owner-occupied (un-hosted) properties
- Requirements for the property to be the host's main residence
- Different classifications based on rental frequency.
- Separate categories for whole-house rentals and room rentals.
Understanding the applicable state and local law definitions is crucial, as it determines the regulations governing your property and legal operation requirements. This requires consultation with state authorities and local planning departments or municipal officials to ensure a clear understanding of your property’s classification under all applicable ordinances.
Starting a Short-Term Rental Business in Maryland
Launching a short-term rental business in Maryland requires navigating state and local regulations, which vary by location. Success depends on thorough research and adherence to evolving rules, as the state and communities adjust their approach to vacation rentals.
1. Research state and local regulations
Before buying a property or converting an existing one to a short-term rental, investigate state requirements and local regulations. Maryland's two-tiered approach means compliance with state requirements alone is insufficient if local regulations impose additional restrictions.
This preliminary research is important in Maryland, where jurisdictions have implemented restrictions on short-term rentals. For example, Baltimore City requires the property to be the host's primary residence and deeded in their name, Ocean City has moratoriums on new licenses in certain districts, and Prince George's County requires notifying neighbors of intent to operate a short-term rental.
Start your research with the Maryland Short-Term Rental Commission website, then the local government website for your city and county. Focus on planning departments, zoning offices, and business licensing divisions. Look for ordinances addressing short-term or vacation rentals in municipal codes related to housing, business licensing, or zoning regulations.
2. Obtain Licenses and Permits
Maryland requires a state-level license for short-term rentals, and many cities and counties require additional local authorizations. These licenses and permits are essential for legal compliance and typically involve:
- Application forms with detailed property information.
- Proof of ownership and property details
- Safety certifications or inspection reports.
- Payment of licensing fees
For example:
- The Maryland Short-Term Rental Commission state license costs $100 each year.
- Baltimore City requires ashort-term rental license every two years costing $200.
- Gaithersburg requires a $200 permit every two years.
- Prince George's County charges $150 for an annual license.
Application processes vary by location. Some offer online systems and others require in-person submissions and inspections. Processing times range from a few days to several months (Prince George's County's process takes around 90 days), making advance planning essential if you hope to start operations during peak tourism or event seasons.
3. Understand Zoning Restrictions
Zoning regulations are a significant barrier to operating a short-term rental in Maryland. Many cities and counties restrict them to specific zoning districts or impose density limitations.
For example:
- Baltimore City subjects short-term rentals to zoning regulations for alignment with residential neighborhoods.
- Ocean City has strict regulations in R-1 and MH districts, focusing on preserving residential character.
- Prince George's County has zoning rules to uphold community standards.
Before purchasing or converting a property, verify that short-term rentals are permitted in your zone and if there are additional criteria, such as parking requirements, occupancy limitations, or property type restrictions. This information is available through city planning departments or zoning offices.
4. Comply with Safety Standards
Short-term rental safety requirements in Maryland typically include:
- Working smoke detectors
- Carbon monoxide alarms for properties with gas appliances or fireplaces.
- Fire extinguishers
- Emergency exit plans
- Compliance with building regulations
- Maximum occupancy limits based on square footage and bedroom count.
- Proper electrical and plumbing systems.
Many jurisdictions require initial safety inspections for permit applications and some mandate periodic re-inspections to ensure compliance. These standards satisfy regulatory requirements and help protect guests and reduce liability for property owners.
5. Register for Tax Collection
In Maryland, short-term rental operators have various tax obligations:
- State Sales Tax: Maryland imposes a statewide 6% sales tax on short-term rentals of 88 nights or fewer.
- Local Taxes: Cities and counties may impose additional hotel or occupancy taxes.
To collect these taxes, register with the Maryland State Department of Assessments and Taxation (SDAT) for state taxes and your local tax authority for municipal taxes. Platforms like Airbnb and Vrbo collect and remit some in certain Maryland jurisdictions, but operators are responsible for fulfilling all obligations.
Clear record-keeping is essential for accurate tax reporting, including documentation of rental income, occupancy periods, and collected taxes. Many professional hosts use specialized software to track these obligations and ensure compliance with different requirements.
6. Secure Insurance
Standard homeowners insurance typically doesn't cover commercial short-term rental activities, creating a potential coverage gap for unprepared operators. Adequate insurance for Maryland rentals includes:
- Property coverage for the dwelling and contents
- Liability protection for guest injuries
- Business interruption coverage
- Coverage for theft or damage caused by visitors
Many Maryland jurisdictions require proof of insurance for the permit application process, usually with minimum coverage thresholds. For example, Gaithersburg and Prince George's County require short-term rental operators to maintain liability insurance of at least $1,000,000.
Many major insurers now offer specialized short-term rental policies or endorsements to standard homeowners policies. Platforms like Airbnb and Vrbo also provide limited host protection programs, but these have significant limitations and exclusions, making dedicated insurance advisable.
7. Establish Local Management
Some Maryland jurisdictions require short-term rental operators to designate a local contact person to respond to issues promptly. This requirement is important for out-of-state owners who cannot address emergencies or complaints personally.
The local contact must:
- Be available by phone.
- Respond to issues within a set timeframe.
- Access the property.
- Be empowered to address problems.
Non-local owners often need to hire a professional property manager or establish a relationship with a reliable local contact. They must provide the information to the permitting authority and, in some cases, display it in the rental unit.
Licensing Requirements
Maryland has a two-tiered licensing system for short-term rentals, with state and local requirements. This creates a more complex regulatory framework than in states that delegate licensing to local jurisdictions.
All short-term rental operators in Maryland must obtain a license from the Maryland Short-Term Rental Commission. This state license establishes consistent requirements throughout the state, regardless of local regulations.
- The state license costs $100 each year.
- Requirements include property information, owner details, and safety compliance.
- The application process is uniform across the state.
Beyond this state requirement, local licensing varies significantly across cities and counties:
Baltimore City
Baltimore City has established a short-term rental license system with specific requirements:
- A biennial short-term rental license costs $200.
- The property must be registered in the host's name and be their primary residence.
- The property must be free of code violations.
- All listings must include the license number.
- Safety inspections are required, including checking smoke and carbon monoxide detectors.
- Compliance with city noise ordinances is required.
- You must provide emergency contact information.
Gaithersburg
Gaithersburg's licensing system includes:
- $200 biennial short-term rental permit
- HOA approval required.
- Smoke and carbon monoxide detectors are required.
- Emergency contact information must be displayed.
- A $1,000,000 liability insurance is required.
- Signage and safety posting requirements must be fulfilled.
Ocean City
Ocean City has implemented specific licensing requirements:
- Licensing focuses on adherence to safety and parking regulations.
- As of early 2025, there was a moratorium on new licenses in R-1 and MH districts, though existing license holders could renew.
- Converting spaces into bedrooms requires town permits.
- Occupancy is limited to two people per bedroom plus two additional occupants (excluding children under 10).
- Noise ordinances are enforced, especially overnight.
- On-site parking must be kept adequate.
Prince George's County
Prince George's County has its own licensing system:
- Annual license fee of $150
- The licensing process takes around 90 days, with a temporary license issued during the review.
- Proof of $1,000,000 liability insurance is required.
- Hosts must inform neighbors of their intent to operate a short-term rental.
- One parking space must be provided for every three guests.
- For certain permissions, the rental must be the host's main residence.
Application processes involve submitting detailed information about the property and owner, including:
- Property address and specifications
- Owner identification and contact information
- Floor and site plans
- Local contact details
- Proof of insurance.
- Certification of compliance with safety standards
State licenses and local ones have defined validity periods one year for state and often two for local. After these, renewal is required. The process involves confirming compliance with regulations, updating property information, and paying fees.
License Renewals
Maintaining valid licenses and permits for Maryland short-term rentals requires attention to renewal processes and deadlines at both the state and local levels. These differ between the state license and local jurisdictions.
The Maryland Short-Term Rental Commission state license is renewed annually, while local licenses follow different timeframes:
- Baltimore City licenses are renewed every two years.
- Gaithersburg permits renew every two years.
- Prince George's County licenses renew each year.
The renewal process involves:
- Submitting a renewal application before the expiration date
- Paying renewal fees, like initial application fees.
- Updating property and contact information as necessary.
- Confirming ongoing regulatory compliance
- In some cases, undergo re-inspection to verify safety compliance.
Property owners and managers must track renewal deadlines, as operating with an expired license can result in penalties. Many jurisdictions impose fines for continued operation without valid licenses, and some implement additional penalties for repeat violations, including potential revocation or disqualification from future permit eligibility.
Most authorities send renewal notices as a courtesy, but the responsibility for timely renewal rests with the property owner. Changes in contact information or mail delivery issues could result in missed notifications, making proactive tracking of deadlines important.
The renewal process allows authorities to verify compliance and implement any regulatory changes since the initial license was issued. It is important to stay informed about evolving short-term rental regulations in state law and your local jurisdiction.
Required Documents
Operating a short-term rental in Maryland requires maintaining documents to demonstrate compliance with state and local regulations. These materials support the initial license applications, facilitate ongoing operations, and may be requested during inspections or in response to issues.
Essential documentation includes:
- Proof of property ownership, like a deed or tax record, establishes your legal right to operate a short-term rental at the location. It is important in jurisdictions with owner-occupancy requirements or restrictions on non-owner rentals.
- Property information including address, number of bedrooms, and floor plans is used by jurisdictions to determine occupancy limits and ensure the property meets basic guest accommodation requirements.
- Owner and operator identification and contact details, including IDs and contact information, ensure authorities can reach the responsible party and verify operators meet residency requirements for specific permits.
- Local contact information for property management or emergencies. This representative must be available to address issues promptly, especially for absentee owners who cannot respond to emergencies.
- Proof of liability insurance with at least $1,000,000 coverage. Many Maryland jurisdictions require documentation with minimum levels.
- State and federal tax identification numbers (Maryland State Sales Use and Tax ID, EIN or SSN) for tax reporting purposes facilitate accurate collection and reporting.
- Compliance certifications for smoke detectors and carbon monoxide alarms verify the property meets safety and neighborhood standards.
Responsible operators maintain additional records to support their business operations beyond these regulatory documents, including:
- Guest agreements and house rules
- Cleaning and maintenance records
- Tax payment records and receipts
- Communications with local authorities or neighbors.
Organizing these materials in physical and digital formats ensures quick access. Many professional hosts create comprehensive digital filing systems with backup copies of critical documents, protecting against loss and enabling remote access.
Taxes for Short-Term Rentals
Maryland imposes significant tax obligations on short-term rental operators at the state and local levels. Understanding and fulfilling these responsibilities is essential for legal compliance and financial management of vacation properties.
State Sales Tax
Maryland imposes a 6% statewide sales tax on short-term rentals of 88 nights or less, known as a lodging or hotel occupancy tax. This state-level tax applies to short-term accommodations throughout the state, creating a consistent obligation.
All short-term rental operators must collect this tax from guests and remit it to the Maryland State Department of Assessments and Taxation (SDAT). Registration with SDAT is necessary for accurate tax collection and reporting.
Local Taxes
In addition to the state sales tax, many Maryland cities and counties impose their own hotel or occupancy taxes on short-term accommodations:
- Baltimore City may impose additional local taxes beyond the state sales tax.
- Ocean City collects Maryland's 6% sales tax and a local hotel or occupancy tax.
- Other jurisdictions may have specific rates.
In addition to the state sales tax, local taxes are collected, creating varying combined rates across Maryland. Individual municipalities manage local tax registration and remittance procedures with different requirements.
Tax Collection
Major booking platforms like Airbnb and Vrbo collect and remit some taxes on behalf of hosts in Maryland, but these arrangements don't cover all or may apply only to direct bookings. Operators remain responsible for ensuring all tax obligations are met.
When platforms collect taxes, they typically focus on the state sales tax, leaving local taxes to the property owner. Verify which your booking platforms collect and which are your responsibility.
Income Taxes
Rental income from short-term rentals in Maryland is subject to state and federal income taxes. Maryland's state income tax rates vary by income level, while federal rates depend on your overall income and filing status.
Short-term rental operators can reduce their tax burden through various business-related deductions, including:
- Property depreciation
- Mortgage interest
- Property taxes
- Utilities and internet
- Cleaning and maintenance expenses
- Furnishings and supplies
- Platform commission fees
- Marketing expenses
- Professional service fees
Property Tax Implications
In Maryland, operating a short-term rental generally doesn't change the property's tax classification, as they are typically taxed as residential properties. However, specific impacts vary by jurisdiction, so consult local tax authorities or a tax professional for more information.
Proper record-keeping is essential for maximizing deductions while maintaining tax compliance. Many professional hosts work with accountants specializing in short-term rentals to enhance their tax strategy and ensure accurate reporting.
Statewide Rules
Unlike many states that delegate regulatory authority to local governments, Maryland has implemented significant statewide oversight of short-term rentals. This creates a consistent regulatory framework across the state, though local jurisdictions retain authority to implement further requirements.
Maryland's state-level approach requires all short-term rental operators to obtain a license from the Maryland Short-Term Rental Commission. This statewide licensing system establishes consistent baseline requirements throughout the state, regardless of local regulations.
Key elements of Maryland's statewide framework include:
- State License Requirement: All short-term rental operators must obtain and maintain a license from the Maryland Short-Term Rental Commission, with an annual fee of $100.
- Standard Definition: State law defines short-term rentals as the rental of a residential property for 88 nights or less. This creates uniformity in how these accommodations are classified.
- Safety Standards: State regulations establish minimum safety requirements for short-term rentals, including smoke detectors, carbon monoxide alarms, and fire extinguishers.
- Tax Framework: State law establishes a 6% sales tax for short-term rental transactions, creating a consistent baseline obligation.
While these state requirements create a foundation for regulation, Maryland law does not preempt local authority to implement additional rules. Cities and counties retain the ability to enact stricter regulations tailored to their specific needs.
This balanced regulation approach reflects Maryland's effort to ensure a consistent minimum standard statewide while preserving local control over issues with varying community impacts. The state licensing system ensures all short-term rentals meet basic safety and accountability requirements, while local regulations address community-specific concerns about neighborhood character, housing availability, and other local impacts.
This state-level framework creates both clarity and complexity for property owners and investors. The consistent state requirements provide a clear starting point for compliance planning, but the additional layer of local regulations requires careful research and ongoing monitoring of location-specific requirements.
Short-Term Rental Laws by City
Maryland's cities and counties have developed distinct regulatory approaches to short-term rentals. They have built upon the state's licensing requirements to address their unique housing markets, tourism patterns, and community priorities. Understanding these regulations is crucial for successful operation in different markets across the state.
1. Baltimore
Baltimore, as Maryland's largest city, has implemented one of the state's most organized regulatory frameworks for short-term rentals.
Overview: Baltimore City defines a short-term rental as a rental of a primary residence for less than 90 nights. The city requires them to be registered and licensed, whether hosted or un-hosted. The property must be the host's primary residence, deeded in their name, and free of code violations.
Key Regulations:
- Hosts must obtain a biennial short-term rental license costing $200.
- All listings must include the license number.
- The property must be registered in the host's name and be their primary residence.
- Property must pass safety inspections, including smoke and carbon monoxide detectors.
- Short-term rentals must comply with zoning regulations to suit residential neighborhoods.
- Hosts must adhere to operational standards and cannot host weddings or large gatherings.
- Compliance with city noise ordinances is mandatory.
- You must provide emergency contact information.
Baltimore City enforces these regulations through its licensing and inspection program. The city's approach balances the popularity of short-term rentals with the preservation of housing availability and neighborhood character.
Tax Rates:
- 6% sales tax
- Additional local taxes may apply. Specific rates should be verified with the city's Department of Finance.
2. Gaithersburg
Gaithersburg, as a key city in Montgomery County, has developed its own strategy for short-term rental regulation.
Overview: Gaithersburg defines short-term rental as rentals for less than 30 consecutive days, consistent with Montgomery County definitions. The city requires a biennial permit for hosts, and the rental must be the host's primary residence.
Key Regulations:
- A biennial short-term rental permit, costing $200, is required.
- Applicants must provide HOA approval.
- Safety measures like smoke and carbon monoxide detectors must be in place.
- Emergency contact information must be displayed.
- Zoning regulations require short-term rentals to operate in residential zones and maintain compatibility with the neighborhood.
- Events aren’t permitted at short-term rentals.
- Hosts must maintain $1,000,000 in liability insurance.
- You must fulfill signage and safety posting requirements.
Gaithersburg's approach reflects its suburban character and focus on maintaining residential neighborhood quality while allowing homeowners to engage in the short-term rental market.
Tax Rates:
- 6% sales tax
- Montgomery County has extra local taxes for short-term rentals.
3. Ocean City
Ocean City, as Maryland's premier beach destination, has implemented specific regulations for its seasonal tourism market.
Overview: Ocean City defines short-term rentals as accommodations for less than 30 consecutive days, similar to Maryland definitions. The city has specific regulations, including a moratorium on new licenses in certain districts and occupancy limits; existing ones can be renewed.
Key Regulations:
- As of early 2025, there was a moratorium on new licenses in R-1 and MH districts, but existing holders can renew.
- Licensing involves showing adherence to safety and parking regulations.
- In R-1 and MH districts, regulations are strict, focusing on preserving residential character.
- Converting spaces into bedrooms requires town permits.
- Occupancy is limited to two people per bedroom plus two additional occupants (excluding children under 10).
- Noise ordinances are enforced overnight (midnight to 7 a.m.).
- Adequate on-site parking must be maintained.
Ocean City's approach reflects its position as a vacation destination with a significant second-home market and seasonal population changes.
Tax Rates:
- 6% sales tax
- Additional local hotel or occupancy tax.
- Confirm local tax rates with Ocean City authorities.
4. Prince George's County
Prince George's County, a large county bordering Washington D.C., has developed its own regulatory framework for short-term rentals.
Overview: Prince George's County defines short-term rentals as residential occupancies for under 30 consecutive days. The county requires hosts to obtain a license and maintain liability insurance. If the owner is absent during the rental, the property must be the host's primary residence.
Key Regulations:
- Hosts must obtain a license with a $150 yearly fee.
- Proof of $1,000,000 liability insurance is required.
- The licensing process can take around 90 days. A temporary license is issued during the review.
- Regulations aim to ensure short-term rentals do not negatively impact residential neighborhoods.
- Hosts must inform neighbors of their intent to operate a short-term rental.
- You must provide one parking space per three guests.
- The rental must be the host's primary residence to qualify for certain permissions.
Prince George's County balances property owners' interests with neighborhood preservation concerns, considering its proximity to the capital and housing market pressures.
Tax Rates:
- 6% sales tax
- Local occupancy taxes may apply and should be confirmed with county authorities.
Bottom Line
Running a short-term rental in Maryland requires navigating the state's two-tiered regulatory landscape. Property owners must ensure compliance and effective operational planning with significant state-level requirements and varied local regulations.
Before investing in a short-term rental property in Maryland:
- Research state licensing and local regulations, including business licensing, zoning, and operational standards. Consult the Maryland Short-Term Rental Commission, city planning departments, business licensing offices, and legal advisors.
- Consider location carefully. Local regulations beyond state requirements may make some areas more favorable for short-term rental investments than others, even within the same region. For example, Baltimore's primary residence requirement creates different operational parameters than areas without such restrictions.
- Budget for compliance costs. Include state and local license fees, tax obligations, insurance requirements, and ongoing operational expenses related to regulatory compliance. These costs vary by jurisdiction and should be included in your financial planning.
- Implement professional management practices. Regardless of specific requirements, professional standards for guest screening, property maintenance, noise management, and neighbor relations prevent problems and support business sustainability.
- Stay informed about evolving Maryland's short-term rental regulations at the state and local levels in response to market growth and community feedback. Monitor communications from the Maryland Short-Term Rental Commission and local government channels to remain aware of regulatory changes.
The short-term rental landscape in Maryland presents opportunities and challenges. Operators can build successful businesses that contribute positively to the tourism and housing economy while maintaining good relationships with communities and authorities by understanding and adhering to state and local regulations. Proper compliance avoids penalties and supports the long-term viability of your vacation rental investment in Maryland.
